GOODMAN GROUP — Annual Report 2006

Aug 20, 2006

Contents

Section 1	Year in Review	3
Section 2	Financial Performance	5
Section 3	Property Investment	12
Section 4	Management Services	15
Section 5	Development	18
Section 6	People	22
Section 7	Recap	24
Section 8	Appendices	26

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Macquarie

Section 1 - Year in Review

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Year in Review

• Reported Profit for the year of \$500.3 million with distributable income \$403.8 million $\rightarrow$
• Operating Earnings Per Security ("EPS") of 26.7 cents and Distributions Per Security $\rightarrow$ ("DPS") of 27.5 cents which is in line with most recent forecast
• Reflects EPS growth of 11%* $\rightarrow$
• 87% of earnings from stabilised sources (Property Investment and Management Services) $\rightarrow$
• Conservative headline gearing of 32.2% $\rightarrow$
• Establishment of European funds management and development platform $\rightarrow$
• Increase in organic AUM of 35% and total AUM up to \$28.5 billion $\rightarrow$
• New development commitments totalling \$1.6 billion** and work in progress of \$2.5 $\rightarrow$ billion
• Strong performance of core property portfolio with 3.0% increase on new lease $\rightarrow$ transactions
• Total return of 55.4% over the year $\rightarrow$

* Reflects proforma FY05 EPS of 23.96 cents per security

** Includes Arlington but excludes Eurinpro operations

Section 2 - Financial Performance

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Financial Performance

Results Comparison

• EPS and DPS in line with most recent forecast $\rightarrow$
• Annualised EPS growth of 11.3% $\rightarrow$
• Importantly, parity achieved between EPS and DPS for 2H FY06 $\rightarrow$
• Focus on efficient capital management $\rightarrow$

	YATA TITOHTO BUTTER AT LES	YASYO SYYHYYY COMMITTED AND THE	TIGGSBSON n matata WANDOO WA
Adjusted earnings per security*** (cents)	26.7	24.0	11.3
Distribution per security (cents)	27.5	25.9	6.2
Payout ratio (%)	103.0	108.1	(4.7)
Total assets (\$million)	6,753	5,171	30.6
Gearing $*(\%)$	32.2	36.2	(11.0)
NTA(\$)	1.73	2.15	(19.5)
Units on issue (million)	1,609	1,405	14.5
Market capitalisation (\$million) (closing price \$6.00 at 30 June 06)	9,653	5,732	68.4

*30 June 2005 results reflected normalised full year EPS and DPS on the creation of MGQ. **Gearing is calculated as Total Interest Bearing Liabilities over Total Assets. ***Adjusted EPS excludes unrealised gains on property revaluations, AIFRS and other non-cash adjustments

Financial Performance

MOORTASTIKS	TANGUNIAN KI Alii Tirkiya da Ta
Property Investment	KANDILLIN 375.5
Management Services	102.7
Development	65.1
Operating revenue net of property expenses	543.3
Unrealised gains on investment properties	103.0
Total income	646.3
Expenses from operations	(71.7)
Net interest expense	(69.0)
Tax	(5.5)
Minority interests	0.2
Profit after tax attributable to Securityholders	500.3
Less Unrealised gains on investment properties	(103.0)
Less Other AIFRS adjustments	(10.9)
Adjusted profit after tax attributable to Securityholders	386.4
Transfer from reserves	17.4
Total distributable income	403.8
Adjusted basic earnings per security (cents)*	26.7
Distribution per security (cents)	27.5
Weighted average number of securities - EPS (million)	1,447.0
Weighted average number of securities - DPS (million)	1,468.7

*Adjusted EPS excludes unrealised gains on property revaluations, AIFRS and other non-cash adjustments

Reconciliation of Distributions

Ancient Centre	Manashini I Kivanneyzmet KSENTING 1
Profit after tax attributable to Security holders	500.3
Less unrealised gains on investment property revaluations Less unrealised gains included in associate share of profits	(94.2) (8.8)
	397.3
Add / (Subtract) other AIFRS adjustments:
Gain on disposals recognised in June 2005	(1.8)
Fair value of derivatives and borrowing costs	(7.1)
Straight-lining of rent, amortisation of incentives, deferred tax, ESAP	(2.0)
Adjusted profit after tax applicable to Securityholders	386.4
Reconciliation of Transfer from Reserves
1H FY06 to reflect profits eliminated upon stapling	11.3
Pari Passu	6.1
Total distributable income	403.8

Financial Position

• Conservative headline gearing of 32.2% $\rightarrow$
• Interest cover ratio of 3.5 times $\rightarrow$
• NTA impacted by AIFRS and acquisition of management businesses (Arlington and $\rightarrow$ Eurinpro)
• Interest rate and FX risks hedged $\rightarrow$

	EDENTO EN LA PORTA ASSILISTER	ETAMTSZTT ESSTIRSTER	ESTERN HALL a 14	ETT HALLONG 1111.
Property Investments	4.3	4.6	87	$85\% - 95\%$
Development Land and WIP	0.7	0.7	13	$5\% - 15\%$
Other*	0.1	1.5	N/A	N/A
Total Assets	5.1	6.8	100	100%
Interest Bearing Liabilities	1.9	2.2
Other Liabilities	0.1	0.6
Total Liabilities	2.0	2.8
Net Assets	3.0	4.0
Gearing (%)	36.2	32.2		$35\% - 40\%$

* Other includes Intangible assets of \$1.2 billion

Business Composition

Earnings

• Significant growth in Management Services $\rightarrow$
• Maintaining >80% of earnings from stabilised sources (Property Investment and $\rightarrow$ Management)
• Management Services 17% of 2H FY06 EBIT provides growth potential $\rightarrow$
• Reduction in direct property income supplemented by cornerstone investment $\rightarrow$
• Opportunity to grow cornerstone investments through growth in third party AUM $\rightarrow$
• Attractive development returns across global platform 12% ROC for FY06 $\rightarrow$
• Development to remain less than 20% of Group EBIT $\rightarrow$
• Critical link in offering global Customer Service Model $\rightarrow$
• Majority of earnings derived from transfer to third party funds $\rightarrow$
• Significant competitive advantage in sourcing new investment opportunities $\rightarrow$

a a changail ann an chan		ETH	ZIRAN: A II.
	ESATIONAL	75	Shifthere	75	TYMÄÄ
Property Investment	376	77	178	69	50-60
Management Services	50	10	44	17	$20 - 30$
Development	65	13	35	14	$15 - 20$
Unallocated expenses	(19)	۰	(15)
Total	472	100	242	100

Business Composition

Earnings (cont.)

Geographic earnings (2H FY06) diversification mitigates risk $\rightarrow$

Capital

• Property Investment portfolio will continue to underpin the strength of Balance Sheet $\rightarrow$
• Balance Sheet capacity provides the ability to facilitate new AUM initiatives $\rightarrow$
• Current capacity of approximately \$1 billion $\rightarrow$
• Approximately \$0.4 billion of real estate under due diligence $\rightarrow$
• Capital allocation will be consistent with the desired earnings composition targets $\rightarrow$
• Maintain focus on ROC metrics to maximise long term security holder value $\rightarrow$

Remain comfortable with market consensus EPS of 31.5c for FY07, +18% on FY06

COOLS

Macquarie

Section 3 - Property Investment

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Property Investment

Total Property Investments

Total property investment portfolio of \$4.6 billion $\rightarrow$

Core Property Investments

• Core Australian portfolio performed strongly across all metrics $\rightarrow$
• \$41.5 million in new lease transactions secured 14% of portfolio $\rightarrow$
• 3.0% increase in new lease net rentals sound underlying market $\rightarrow$ conditions
• 80% retention rate in line with long term average $\rightarrow$
• 98% occupancy rate in line with long term average $\rightarrow$
• 3.8% increase in revaluations 7.9% weighted average portfolio cap rate $\rightarrow$
• 5.0 years weighted average lease term in line with long term average $\rightarrow$

MACOUARIE Macquarie Goodman

Property Investment

Cornerstone Investments

• \$0.7 billion in strategic cornerstone investing $\rightarrow$
• 6.7% average income vield $\rightarrow$
• 7.4% average annual return →
• 13.4% average distribution growth $\rightarrow$
• Cornerstone holdings largely represent 15% 30% of equity of third party funds $\rightarrow$
• Strong long term investment and supplements direct real estate investment $\rightarrow$
• Alignment of interest with equity partners in managed fund platform $\rightarrow$
• $\rightarrow$ Maintain strategic investments in new fund initiatives

Warehoused Investments

• \$0.1 billion in warehoused investments at balance date $\rightarrow$
• Minimal current position following major transactions during the year $\rightarrow$
• Creation of MGHKWF \$0.5 billion $\rightarrow$
• Expansion of MGP \$0.2 billion $\rightarrow$
• Continue strategy of short-term investments to seed new fund initiatives $\rightarrow$
• Approximately \$0.4 billion of real estate currently under due diligence $\rightarrow$

Section 4 - Management Services

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Management Services

Performance

• Strong organic AUM growth of 35% $\rightarrow$
• Total AUM of \$28.5 billion (up +310%) $\rightarrow$
• Underlying AUM driven by growth in existing funds and new fund initiatives $\rightarrow$
• Positive performance of European platform in first 6 months $\rightarrow$
• +16% growth in AUM since acquisition $\rightarrow$
• Divisional EBIT margin of 49% $\rightarrow$
• Organic AUM growth to facilitate margin expansion $\rightarrow$
• Reinvestment into new opportunities to facilitate long term growth $\rightarrow$

ENTREADY Middle	ETHERLIS MD	ATTROLOGY M	Cilius Ca MILLE	Citense SI MARKA	Leoninian s
	Sinners	SSTORES	AS STUDIOS
Existing Funds
MGQ.	4.7	4.2	(0.5)	(11)	Core MGQ portfolio disposals to third party funds
A-REIT	1.7	2.4	0.7	41	Acquisition of 28 on market properties
MGP	0.6	0.8	0.2	44	Acquisition of MGQ and on market properties
New Funds
MGWF (AU)		1.2	1.2		Launched in December 2005 at \$1.0 billion
MGHKWF		0.8	0.8		Launched April 2006
Sub Total	7.0	9.4	2.4	35
Arlington Funds		19.1	19.1		Acquired December 2005
Total	7.0	28.5	21.5	310

Management Services

Outlook

• Demand for well structured real estate investment funds remains positive $\rightarrow$
• High quality property assets and future growth opportunities $\rightarrow$
• Capable and aligned management $\rightarrow$
• Managed financial risk $\rightarrow$
• Consistency of asset and equity source →
• Opportunities created from efficiency drives by international business space users $\rightarrow$
• Operating efficiencies and market growth driving demand for new facilities globally $\rightarrow$
• Capital efficiency providing sale and leaseback opportunities with key customers $\rightarrow$
• Launch of Pan European Logistics Fund in 1H FY07 target size c.\$500 million $\rightarrow$
• Investigating opportunity for further European fund initiatives $\rightarrow$
• Continue to focus on leading Asian markets for new fund initiatives $\rightarrow$
• Customer led approach to mitigate risk $\rightarrow$
• Leverage off a global team of operational and capital market real estate specialists $\rightarrow$

COOSTO

Macquarie

Section 5 - Development

Development

Development Completions

• Significant development completions during the year \$916 million* $\rightarrow$
• 8.5% weighted average yield on total project cost $\rightarrow$
• 6.7 years weighted average lease term $\rightarrow$
• 55% pre-committed $\rightarrow$
• Mixture of developments between Group and third party managed funds $\rightarrow$
• 48% completed on balance sheet $\rightarrow$
• 52% completed for third party managed funds $\rightarrow$

MGQ Development Completions (net lettable area)

Development

Development Commitments and Workbook

• Substantial new development commitments of \$1.6 billion* during the year $\rightarrow$
• 8.1% weighted average yield $\rightarrow$
• 7.6 years weighted average lease term $\rightarrow$
• 56% pre-committed $\rightarrow$
• \$2.5 billion of new product currently under development $\rightarrow$
• 60% (\$1.5 billion) under development in third party funds $\rightarrow$
• Geographically diversified development book mitigates risk $\rightarrow$
• 56% Europe $\rightarrow$
• 37% Australia/New Zealand $\rightarrow$

Total	980	1,484	2,463	60
Europe	641	777	1.418	55
Asia	32	109	141
Australia/New Zealand	307	598	905	66
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* Includes Arlington but excludes Eurinpro operations

Development

Financial Performance

• Opportunities to enhance ROC through the early transfer of investments into managed $\rightarrow$ funds
• ROC of 12% for Group development book $\rightarrow$

Development Outlook

• Australia/New Zealand development market remains buoyant $\rightarrow$
• Continue to investigate development opportunities throughout Asian markets $\rightarrow$
• Fragmented European market remains a key opportunity $\rightarrow$
• Customer service model is central to securing development opportunities $\rightarrow$
• Development program underpins the integrated model $\rightarrow$
• ROC increasing as European development platform comes on line $\rightarrow$

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Macquarie

Section 6 - People

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People

• Expanded operating platform increased staff numbers by 600 taking the total to 850 $\rightarrow$
• Located across 14 countries $\rightarrow$
• Integration of Arlington and Eurinpro substantially complete $\rightarrow$
• Key focus on local operatives in local markets to maximise competitive advantage and $\rightarrow$ mitigate risks
• Integration of staff across geographic regions to maximise knowledge sharing $\rightarrow$
• Relocation of senior Australian staff to facilitate opportunities across European $\rightarrow$ platform
• Corporate Services Michael O'Sullivan & Global Customer Team Craig Goodman $\rightarrow$

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Australia/New Zealand	83	70	145	298
Asia	35	6	141	182
Europe	113	137	120	370
Total	231	213	406	850

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Section 7 - Recap

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Recap

• Strong operational performance from all business units $\rightarrow$
• EPS and DPS targets achieved in line with management forecasts $\rightarrow$
• EPS +11% for FY06 $\rightarrow$
• Established a full service European platform $\rightarrow$
• Organic AUM up 35% underpinned by solid operational level performance of $\rightarrow$ funds
• Total AUM of \$28.5 billion provides significant scale and access to future equity $\rightarrow$ partners
• Property Investments performing strongly $\rightarrow$
• Solid development workbook of \$2.5 billion underpins future AUM growth $\rightarrow$
• Key objectives for FY07 $\rightarrow$
• Capitalise on strong share in Australia and New Zealand development markets →
• Customer led expansion through new Asian markets $\rightarrow$
• Grow market share of European development opportunities $\rightarrow$
• Launch of Pan European Logistics fund in 1H FY07 $\rightarrow$
• Maintain earnings composition of >80% from stable sources $\rightarrow$

Remain comfortable with market consensus EPS of 31.5c for FY07, +18% on FY06

Section 8 - Appendices

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1999 - Johann John Stein, Amerikaansk politiker (

Albanya (Albanya Albanya)

Timburgan

Communication

.......................................

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Appendices Contents

Page Number Total Income by Business Segment 28 Total Income by Geographic Segment 29 Development Income Reconciliation 30 Reconciliation to PDS 31 Key Balance Sheet Impact of AIFRS 32 Movement in Net Assets 33 Financial Position 34 Capital Management 35 Property Investment 41 Cornerstone Investments 48 Management Services 49 Funds Management 50 Property Development 56 Acquisitions and Disposals 61 Customer Base 62 Geographic Coverage 63

27

Total Income by Business Segment

for the year ended 30 June 2006

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	STY	SII	ET.	E TIVE	$\mathbb{R}$ 11
Gross property income	434.9	434.9
Net gain from fair value adjustment on investment properties:
- realised (wholesale fund 70.0%)	19.3			19.3
- unrealised	94.2				94.2
Net gain on disposal of investment properties	39.3			39.3
Share of net results from equity accounted investments	46.7	22.5	13.6	1.8	8.8
Net gain on disposal of equity investments	4.7			4.7
Funds management	62.8		62.8
Property services	9.4		9.4
Development management	17.0		17.0
Distributions from listed investments	8.7	8.7
Total revenue and other income	737.0	466.1	102.8	65.1	103.0

Total Income by Geographic Segment

for the year ended 30 June 2006

CONTRACTOR	KO HA Side of the Second State	KI.	ATRICIES MOVEMENTS I TI	The Company STOR	Representation ETHE
Gross Property Income*	466.1	425.8	16.4	20.3	3.6
Management Income	102.8	22.7	9.3	$**6.2$	64.8
Development income	65.1	54.9	8.5	1.0	0.7
Unrealised gains	103.0	95.1	7.0	0.9
Total	737.0	598.5	41.1	28.3	69.1

*Includes distributions from cornerstone investments

**Reflects the equity accounted net income brought to account for the year

Development Income Reconciliation

II:LEIGHE	rene a DISKE TRES SII	ZA 3 M. SA (S a katalung kalendar ya masu SII	800 DIGWYD HALLA SUI
MGWF creation - Stabilised assets	762.0		762.0
MGWF creation - Development assets	267.6		267.6
MGWF - Other (December 2005)	39.2		39.2
HK property sale to MBL	292.5		292.5
Third Party	23.0		23.0
Sub Total	1,384.3		1,384.3
MGHKWF creation		538.5	538.5
MGP Sales		260.6	260.6
MGWF transactions
ACI Portfolio (May 2006)		110.5*	110.5
Tranche 1 (May 2006)		37.3	37.3
Tranche 2 (June 2006)		69.4	69.4
Third Party		158.2	158.2
Sub Total		1,174.5	1,174.5
Gross Proceeds	1,384.3	1,174.5	2,558.8
Profits Recognised	30.1	35.0	65.1

* Includes \$8.5 million of realised profit from stabilised investment property

Reconciliation to PDS

	REGISTER AND REGIST	经营业	经统计 16 ROY an s CONTRACTOR	22488	a City	H. S. 80.80	AU.
Major transactional variances from PDS
HONG KONG ACQUISITIONS
HONG KONG SALES
MGWF CREATED
ARIJNGTON	1963 BHANAICHEANACH A
SALES TO MGW	33 Martin 1992 - 1993 - 1994 - 1995 - 1996 - 1997 - 1998 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 19
SALES TO MGP
MGHKWF CREATED
EURINPRO
OTHER ASSET SALES
DRP
FIEPS
Guidance FY06	4/05 PDS HE S		Management Presentation		Management Presentation
EPS c DPS c	O.		267 27.5		26.7 27.5
Major Assumptions	· Acquistions \$0 4b held on balance sheet · Development completions \$0.40 held on balance sheet · Disposals \$0.1b to realise \$20m of gains from sale		· Amnaton acquisition added annual ESIT of £19 1m · UK denominated debt funded . No further transfer from reserves to cover "MGM eliminations" from 2H FY06		· Re-affirmed FY06 quidance . Added 112m new securities
	* No RePS conversion . No MGWF in forecast . No MGHKWF in forecast		. DRP organic take up and equity issue \$0.3b . Revised EPS quidance up implying 27 5cps annualised EPS and DPS
	. No asset sales to MCP · No castribution of unrealised development motits · Contained \$23.5m distribution of "MGM eliminations' transferred from reserves creating EPS/OPS gap
	· Inisiled gearing c38%
Reported EPS ¢			Reported on 1H FY06 earnings in March 06 Reported August 06 12.2		26.7	2002 - Samuel Albert School (School School (School School School School School School School School School S

Key Balance Sheet Impact of AIFRS

Net fangible Asset Reconciletion	8116	8118	The Communication
Net assets as at 30 June 2005 (Previous AGAAP)		3,093.1	1.96
AIFRS adjustments
Deferred tax	(12.7)
Employee Security Acquisition Plan (ESAP)	(19.6)
Deferred leasing costs and incentives	(6.1)
Other	(2.4)	(40.8)	(0.03)
Net assets at 30 June 2005 under AIFRS		3,052.3	1.93
AIFRS financial instruments adjustment at 1 July (AASB 132 and AASB 139)
Adjusted for RePS on 1 July (treated as debt under AIFRS)		(51.0)	(0.03)
Adjusted for fair value of derivatives and borrowing costs		(14.9)	(0.01)
Net assets at 1 July under AIFRS		2,986.4	1.89

* Calculated on 1,435.8 securities

Movement in Net Assets

Net Tanglile Asset Reconciliation	SIII	KNO	$\mathbb{R}$ E MADA
Net assets at 1 July under AIFRS		2,986.4	1.89
Less: Minority interests		(18.2)	0.01
Net assets attributable to security holders		2,968.2	1.88
Revaluation of non-current investments during the year
Revaluation of investments properties in associates	8.8
Revaluation of investment properties	94.2	103.0	0.07
Revaluation of investments (incl A-REIT)		15.1	0.01
Movements in equity
Equity issues (DRP and RePS conversion, net of issue costs, effect of ESAP, and minority interests)		852.0	0.53
Other
Transfer from reserves (EPS/DPS gap, Pari Passu, other AIFRS adjustments)		(6.5)
Actuarial gains on defined benefit fund		2.7
Change in fair value of derivatives and foreign exchange losses		15.9	0.01
Share of profit attributable to minority interest		(0.2)
Net assets attributable to security holders at 30 June 2006		3,950.2	2.50
Less Intangibles (Arlington, Eurinpro, MGP)		(1, 185.6)	(0.75)
Net tangible assets at 30 June 2006		2,764.6	1.75

* Calculated on 1,577.9 million securities being closing securities on issue of 1,608.8 million less 30.9 million securities related to ESAP

Financial Position

• Headline gearing of 32.2% $\rightarrow$
• $\rightarrow$ Conservative balance sheet allocation to off shore operations

EXPERIMENTAL	8918	ATENTI NATIONAL PROPERTY アントリンス	Altri - 17番	ELI VA ETILOTICA 81	IO C SI W
Investment properties	3,988.4	180.9	20.7	0.0	4,190.0
Investments in managed funds	189.3	155.0	233.5	119.8	697.6
Other assets*	192.2	35.4	71.8	1,566.2	1,865.6
Total assets	4,369.9	371.3	326.0	1,686.0	6,753.2
Interest bearing liabilities	888.0	277.5	263.4	743.4	2,172.3
Other liabilities	177.3	44.7	19.5	368.1	609.6
Total liabilities	1,065.3	322.2	282.9	1,111.5	2,781.9
Net assets	3,304.6	49.1	43.1	574.5	3,971.3
Gearing					32.2%

Capital Management

Summary

• New equity raised during the year including $\rightarrow$
• $\rightarrow$ Distribution reinvestment plan ("DRP") \$339.3 million
• $\rightarrow$ RePs conversion \$74.1 million
• $\rightarrow$ Institutional placement of \$321.7 million
• $\rightarrow$ Equity issue to vendor of Eurinpro \$170.8 million
• Total group borrowings at \$2,172 million with gearing conservatively at 32.2%. $\rightarrow$
• Interest Cover of 3.5 times $\rightarrow$
• Interest rates are hedged to 81% over the next 12 months at 4.83% with a weighted average maturity of $\rightarrow$ 7.2 years
• Offshore operations are predominately debt funded in the local currency, reducing the need for $\rightarrow$ derivatives.

Equity

• \$936 million in new equity issued during the year $\rightarrow$
• Closing number of securities on issue 1,608.8 million* $\rightarrow$
• Market capitalisation of 9,652.8 million at a \$6.00 security price $\rightarrow$

	SERIT TEST SSIED	BERTH
DRP and other	76,755,054	341.1
Conversion of RePS	30,537,580	110.0
Equity issue to vendor of Eurinpro	33,483,220	170.8
Institutional Placement	63,079,094	321.7
Less issue costs		(8.0)
Sub Total	203,854,948	935.6
Effect of ESAP securities	(22, 232, 875)	(110.2)
Total	181,622,073	825.4

* Includes 30.9 million of ESAP securities

Debt Management

Funding Diversification

• Current Debt Platform $\rightarrow$
• → Refinancing of Australian bank debt facilities completed in July 2005 with a A\$1.4 billion Syndicated Multi Currency facility

Currency Mix

$\rightarrow$ \$603 million of CMBS maturing in November 2006

CURRENCY $\frac{9}{20}$ USD $\mathbf{1}$ HKD 5 GBP 6 SGD $\overline{7}$ NZD $13$ 28 EURO $\mathbb{A}\mathsf{U}\mathbb{D}$ 40

Debt Management

Gearing $\rightarrow$

• $\rightarrow$ Total interest bearing liabilities of \$2,172 million
• $\rightarrow$ Target range of 35% 40%
• $\rightarrow$ Group gearing of 32.2%

Interest Cover $\rightarrow$

$\rightarrow$ EBITDA to total interest expense of 3.5 times

Interest rate $\rightarrow$

• $\rightarrow$ Interest rates are hedged to 81% over next 12 months
• $\rightarrow$ Weighted average hedge rate of 4.83%
• $AUD 5.99%$
• $NZD 6.70\%$
• $SGD 3.58%$
• $HKD 4.98%$
• $GBP 4.69%$
• Euro $-3.82%$
• $\rightarrow$ Weighted average maturity of 7.2 years.

Interest Rate Hedging Profile

Risk Management

$\rightarrow$ Capital Hedging

• $\rightarrow$ The Group, where practical, will fund its international commitments and investments in the local foreign currency.
• $\rightarrow$ Cross Currency Swaps will be considered on a case by case basis as required.
• $\rightarrow$ Foreign sourced income
• $\rightarrow$ Foreign currency exposures in GBP, Euro, NZD, SGD, HKD and USD from the the Group's investments in direct property, cornerstone investments and management companies.
• $\rightarrow$ The Risk Management Policy for the Group allows for foreign currency hedging to a minimum of 95% of forecast foreign cash flows for a minimum of 3 years.

$\rightarrow$ Interest rate

$\rightarrow$ Board approved strategy adopting maximum and minimum ranges as outlined in the table below:

	e di controlle									12 YO MARKET ALL YEARS THAT HE YOU HAVE A LIGHT OF THE STREET AND THE T
MAX %	100	90	90	80	70	50	50	20	20	20
MIN %	60	50	50	40	20

Property Investment

• 86 properties with a total value of \$3.8 billion located across key Australian markets $\rightarrow$
• Intensive management and buoyant market conditions delivering strong underlying $\rightarrow$ performance
• $\rightarrow$ 368,248 sqm (\$41.5 million net annual rental) of existing space leased
• $\rightarrow$ Customer retention of 80%
• $\rightarrow$ Average increases of 3.0% on passing rentals
• Average valuation cap rate of 7.9% $\rightarrow$
• 98% occupancy and a weighted average lease expiry of 5.0 years $\rightarrow$
• Revaluations adding \$113.5 million in value for the 12 months $\rightarrow$

Geographic Diversification

STATE	₩
OTHER	2
QUEENSLAND
VICTORIA	14
NEW SOUTH WALES	82

ASSET CLASS
BUSINESS PARK	30
SUBURBAN OFFICE
INDUSTRIAL ESTATE
WAREHOUSE/DISTRIBUTION
OFFICE PARK	95

Asset Class Diversification

1. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. Jan 17. J

Occupancy and Lease Expiry

• Positive performance in most regions $\rightarrow$
• WALE of 5.0 years in line with historical average $\rightarrow$
• Occupancy maintained at 98% $\rightarrow$

Ministeration	Henry Matolic	TITES DESTATOS	MATE ATTELETOIS	OBRIGANIA naszna	The Communication RTHE ZOOS
		A T. C.	AT STRI	n Mari	n Ma
Sydney South	16	4.2	4.1	99	99
Sydney West	23	4.1	4.8	99	97
Sydney Outer West	18	6.4	6.0	100	99
Sydney North	23	4.7	4.5	96	97
Victoria	14	6.1	5.6	98	99
Queensland	4	4.8	5.0	100	100
Other	2	7.0	6.1	100	100
Total	100	5.1	5.0	98	98

Leasing Deals

• Leased 368,248 sqm of existing space (14% of the portfolio) $\rightarrow$
• \$41.5 million net annual rental $\rightarrow$
• Average lease term on new deals of 4.5 years $\rightarrow$
• Average rental increases of 3.0% on new lease transactions $\rightarrow$

EN TOTA	T. Termin	MES MARTIN TAKO	Termining I SAN SALA	Termining and LABUR MALL
	SOU	81	A SANTO	e Tagg
Sydney South	33,633	4.4	4.2	15.0
Sydney West	142,317	15.6	4.0	2.0
Sydney Outer West	65,228	5.5	3.8	1.5
Sydney North	53,605	10.7	6.3	1.0
Victoria	53,155	3.6	4.1	1.8
South Australia	11,986	0.6	1.0	$\overline{\phantom{a}}$
Queensland	8,324	1.1	3.0	2.3
Total	368,248	41.5	4.5	3.0

Customer Retention

• $\rightarrow$ Solid retention in all key regions:
• 80% for the year $\rightarrow$
• 82% rolling three years $\rightarrow$
• 80% rolling four years $\rightarrow$

a Tanzania	E TANA MARIS MARINE MARIS a i Po	THE COMMUNICATION
Sydney South	21	89
Sydney West	30	78
Sydney Outer West	16	82
Sydney North	21	89
Victoria	8	93
Queensland	4	48
Total	100	80

Weighted Average Lease Expiry*

• Stable lease expiry profile $\rightarrow$
• 38% of income expiring beyond five years $\rightarrow$

Expiry Profile

Manageable lease expiry profile over the next 12 months $\rightarrow$

History	% of portfolio net income expired in the 17 minis rauntyvus	% of politiche nationale expiring to the ME ALLUMBURGA TELEVISION
Sydney South	2.3	3.4
Sydney West	4.3	2.6
Sydney Outer West	2.8	1.7
Sydney North	3.4	2.0
Victoria	1.5	2.2
Queensland	0.5	0.3
Other	n/a	0.3
Total	14.8	12.5

Property Revaluations

• \$3.0 billion of properties revalued for year ended 30 June 2006 $\rightarrow$
• 3.8% increase over previous book values $\rightarrow$
• Solid increases in Victoria and Queensland $\rightarrow$
• Revalued portfolio weighted average capitalisation rate of 7.7% $\rightarrow$
• MGQ portfolio weighted average capitalisation rate of 7.9% $\rightarrow$

ARCHITECTURE	EGOR GINS STO	TETHETOTI 30.	Termina ATTITUDE Printing Co. 20	III SALDA eren ser Maritim	THE REAL PROPERTY Taxe on Revalue II EXIMENT
New South Wales	2,299.8	2,372.7	72.9	3.2	7.6
Victoria	500.4	525.4	25.0	5.0	7.9
Queensland	118.5	130.0	11.5	9.7	8.4
Other	71.4	75.5	4.1	5.7	7.3
Total	2,990.1	3,103.6	113.5	3.8	7.7

Cornerstone Investments

• MGQ holds strategic cornerstone investments in third party managed funds $\rightarrow$
• Provides alignment of interests between MGQ and investors $\rightarrow$
• Supplements direct investment income $\rightarrow$
• Total investment of \$677 million (up 68% from FY05) $\rightarrow$
• Strong performance from investments in 2006: $\rightarrow$
• Average Income Return 6.7% $\rightarrow$
• Average Total Return 7.4% $\rightarrow$
• Average DPU growth of 13.4% $\rightarrow$

		Wet a	731412	Menta	ANG PROTE	ATTITUS SEPTEMBER ETHIC S
MGQ Investment	A\$M	155	132	189	102	99
Cornerstone Share	%	29		30	17	Various
DPU growth FY06*	%	6.0	22.2	N/A	N/A	N/A
FY06 Yield**	%	8.9	6.2	7.8	6.4	$2.5 - 3.0$
Total Return - FY06*	%	11.3	(9.4)	12.7	11.1	$10.0 - 11.0$

*Annualised, market based

** Annualised, based on opening security value

Management Services

Performance

• Solid operational results for all key funds $\rightarrow$
• $\rightarrow$ Strength of full suite and in house service offering
• $\rightarrow$ Active asset management delivering underlying property performance

Filipe y	Company and Company and Company	TAN SERIES 7. T. S. W	ANG SILANDA
A-REIT	95	6.7	65
MGP	98	5.6	87
MGWF	99	8.3	88
MGHKWF	99	2.3	84
ABPP (UK)	94	13.3	N/A

• Financial objectives have been met for all key funds $\rightarrow$
• Long term performance to be delivered by $\rightarrow$
• Ability to leverage on a global team of operational and capital market real estate specialists $\rightarrow$
• Application of the customer service model $\rightarrow$
• Commitment by the Group to sponsor existing and new products $\rightarrow$
• Opportunity to source new investments from the Group $\rightarrow$

Funds Management

Overview

• Management of third party funds on behalf of investors $\rightarrow$
• Total assets under management of \$28.5 billion $\rightarrow$
• Diversified across public and private markets in Australia, New Zealand, $\rightarrow$ Hong Kong, Singapore, UK and Europe

REGION	S BILLION
NEW ZEALAND	0.8
SINGAPORE	2.4
HONG KONG	0.8
EUROPE	19.1
AUSTRALIA	5.4

Australia - Macquarie Goodman Wholesale Fund

• Launched November 2005 with initial portfolio of \$1.0 billion, increasing to $\rightarrow$ \$1.2 billion as at June 2006
• Assets sourced from stabilised MGQ portfolio, development activities and on $\rightarrow$ market acquisitions
• Wholesale investor appetite is strong and returns are healthy $\rightarrow$
• MGQ's high quality development opportunities are typically suitable for $\rightarrow$ MGWF
• MGWF holds some development land in its own right providing an internal $\rightarrow$ development pipeline
• Gearing remains in line with the preferred range of 30% to 40% at 33% (\$0.6 $\rightarrow$ billion equity call in December 2006)

New Zealand - MGP*

• Critical market coverage: $\rightarrow$
• Total assets of \$0.8 billion and market capitalisation of \$0.5 billion $\rightarrow$
• 2nd largest LPT in New Zealand, top 25 entity on NZX $\rightarrow$
• \$286 million of acquisitions throughout the year $\rightarrow$
• \$260 million from MGQ in March 2006 $\rightarrow$
• Strong financial position with gearing at 30.8% (lower end of target range) $\rightarrow$
• Significant development pipeline to provide significant portfolio growth $\rightarrow$
• \$64 million in development projects currently underway $\rightarrow$
• 1.3 million sqm of developable land available for pipeline $\rightarrow$

* Reflects FYO6 period for the respective vehicle.

Singapore - A-REIT*

• Market capitalisation of \$2.4 billion $\rightarrow$
• 2nd largest REIT in Singapore, top 50 entity on the SGX-ST $\rightarrow$
• Assets under management of \$2.4 billion $\rightarrow$
• Acquired 28 properties for \$543 million $\rightarrow$
• Commenced development pipeline with two pre-committed warehouse $\rightarrow$ projects providing \$109 million of new product.
• Acquisition capacity through strong balance sheet position $\rightarrow$
• Gearing at 36.9% within target range $\rightarrow$

*MGQ holds 40% interest in the Ascendas-MGM JV sharing Fund Management, performance fees and acquisition fees. Period represents A-REIT results for

FY06

Hong Kong - Macquarie Goodman Wholesale Fund

• Full service business capability including Funds Management, Property $\rightarrow$ Services and Development Management.
• Launched MGHKWF in April 2006 with initial portfolio of HK\$4.8billion $\rightarrow$
• Strong investor demand $\rightarrow$
• High quality assets in key industrial locations $\rightarrow$
• As at June 2006, the Fund had commitments that take the portfolio to $\rightarrow$ HK\$5.1bn in assets (taking gearing to 36% which is within the 35% to 40% preferred band).
• Property market conditions buoyant and returns are on track. $\rightarrow$

United Kingdom and Europe - Arlington

• $\rightarrow$ Acquired December 2005 with £6.7 billion of FUM
• $\rightarrow$ Focused Funds f2.6 billion and Direct Mandates f4.1 billion
• $\rightarrow$ As at June 2006 total FUM was £7.8 billion up 16% in 7 months
• $\rightarrow$ Focused Funds £2.6 billion and Direct Mandates £5.2 billion
• Property market conditions robust
• Investor demand strong $\rightarrow$
• European Logistics Fund will be major offering next half $\rightarrow$
• Internal asset creation capability should provide scope for growth $\rightarrow$

Property Development

Completed Developments

• 511,999 sqm of projects completed across all groups in the period $\rightarrow$
• End value of \$916 million $\rightarrow$
• 8.5% initial yield on total project cost $\rightarrow$
• Weighted average lease term of 6.7 years $\rightarrow$

8.	Company $\mathbb{C}$ of $\mathbb{C}$	THE TELESCOPE llini S	ESTRE EN 1999	STANDARD AND THE T SIVILLE DEVELOPMENT	MATE Maria Cara
MGQ (Australia)	249,281	8.1	441.3	48	9.5
MG Wholesale (Australia)	36,459	8.8	38.9	4	6.8
MGP (New Zealand)	180,152	8.7	227.4	25	7.3
MG Funds (Europe)*	46,107	9.0	207.9	23
TOTAL	511,999	8.5	915.5	100	6.7

Committed Developments

• \$1.6 billion of new commitments secured across all groups at an initial yield of 8.1% with $\rightarrow$ an average lease term of 7.6 years
• 56% pre-committed (majority of uncommitted space in UK funds) $\rightarrow$
• 81% of development projects secured for third party managed funds $\rightarrow$
• Significant pipeline of growth for both MGQ and third party managed funds $\rightarrow$

Kommittee vavalonnants	Company	ET EN YATIKA	MODIORIE DEVELOPMENTS	TOTAL
	STONIA	$-118$		TANTS
MGQ (Australia)	128,042	229.0	14	10.7
MG Wholesale (Australia)	205,018	351.1	22	15.4
MGQ (New Zealand)	56,835	51.3	3	9.0
MGP (New Zealand)	69,426	58.7	4	9.3
MGQ (Asia)	35,605	31.7	2	5.0
A-REIT (Asia)	69,000	108.8	7	19.8
MG Funds (Europe)*	134,376	777.0	48	2.3
TOTAL	698,302	1,607.6	100	7.6

* Includes Arlington but excludes Eurinpro operations

Development Work in Progress

• 1,435,498 sqm of development product over 55 properties currently underway $\rightarrow$
• Estimated end value of \$2.5 billion with an averaged initial yield of 8.5% and 7.1 year $\rightarrow$ weighted average lease term
• \$1,484 million (60%) under development for third party funds $\rightarrow$

MISTELL	1. 127 $-81.6$	ES E EN ETHE A 1 I	UMBA CITIL DAVARDUNANCE	TATE SE THE STATE
MGQ (Australia)	137,837	250.3	10	10.2
MG Wholesale (Australia)	317,143	534.5	22	16.5
MGQ (New Zealand)	64,759	56.2	2	9.1
MGP (New Zealand)	77,350	63.5	3	9.3
MGQ (Asia)	35,605	31.7		5.0
A-REIT (Asia)	69,000	108.8	4	19.8
MG Funds (Europe)	134,376	777.0	32	2.4
MGQ (Europe)	599,428	641.2	26	4.5
TOTAL	1,435,498	2,463.2	100	7.1

Development Pipeline - MGQ Balance Sheet

• 3.4 million sqm of developable land $\rightarrow$
• Continue to provide high quality investment product for both MGQ and third party managed $\rightarrow$ funds
• Ability to provide "off-market" organic growth for third party funds management activities $\rightarrow$
• Strategically located in key development locations to meet current and future expected $\rightarrow$ demand

MGQ Development Pipeline

REGION
QUEENSLAND ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
SOUTH AUSTRALIA ********
NEW SOUTH WALES	21
VICTORIA 이 문제 이 문제 이 사이는 어머니는 이 문제 이 도 아니다.	33
NEW ZEALAND	38

Sydney Development Pipeline

REGION	℆
SYDNEY OUTER WEST ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	16
SOUTH SYDNEY
SYDNEY NORTH ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
SYDNEY WEST	76

Development Pipeline - MGQ Balance Sheet

$\rightarrow$ 3.4 million square metres of developable land in the portfolio

EN NEUTRA	INTILETTE ATE Sen 1	Committe 2020 San 1	Grinder Krist ATA TARASING ING BACK	Generaliste 1. 1441 $\mathbb{C}^{[n] \setminus [n]}$	SANDAR AN Fine EXHIP
Sydney South	77,033	60,128	78	16,905
Sydney West	1,247,974	696,736	56	551,238	17
Sydney Outer West	828,330	711,678	86	116,652	3
Sydney North	93,205	50,722	54	42,483	1
Victoria	2,154,109	1,015,630	47	1,138,479	33
South Australia	176,670			176,670	5
Queensland	188,146	82,699	44	105,447	3
Auckland	1,845,609	564,740	31	1,280,869	37
Total	6,611,076	3,182,333	48	3,428,743	100

Acquisitions and Disposals

Acquisitions

• \$1,042 million in acquisitions for the year $\rightarrow$
• \$545 million in Asia $\rightarrow$
• \$182 million in Europe $\rightarrow$

Disposals

• $\rightarrow$ \$2,559 million in disposals for the year
• \$1,378 million in Australian $\rightarrow$
  • \$1,286 million to Australian Wholesale Fund $\rightarrow$
• \$831 million in Hong Kong for creation of Wholesale Fund $\rightarrow$

THULL	A THE TIPLE gesprengen	File Controlled
Australia	192	1,378
New Zealand	123	261
Asia	545	831
Europe	182	89
Total	1,042	2,559

Customer Base

Top 20 MGQ Customers (by net income)

35

Geographic Coverage

Total industrial and business space assets under management of \$18.9 billion $\rightarrow$

Macquarie Goodman

Thank you

Disclaimer

This presentation for the year ended 30 June 2006 has been prepared by Macquarie Goodman Group (Macquarie Goodman Management Limited ABN 69 000 123 071 and its controlled entities; Macquarie Goodman Funds Management Limited ABN 48 067 796 641; AFSL Number 223621, collectively "Macquarie Goodman Group" or the "Group"). The information in this presentation is general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making any decision relating to your investment or financial needs. This presentation is not an offer or invitation for subscription or purchase of securities or other financial products. Past performance is no indication of future performance. All values are expressed in Australian currency unless otherwise stated. August 2006